Personal pension contribution advice please

buttercup26

Dear all

I’m a first time poster, and really hope somebody will be able to help with my query.
I have a personal pension which I paid into while I was self-employed for a few years, until my self-employment ceased in Jan 2017.
Since October 2017 I’ve been working part time, and reckon by the end of March 2018 I will have earned £5306.29, and paid £272.09 into a company pension scheme.
My query is, how do I work out the maximum amount that I can pay into my personal pension, in order to maximise the tax relief on my pension contributions for the 2017-2018 tax year?

Thanks very much

Brynsam

See https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/carry-forward

If you need more help, click on 'Where can I find out more?' and use the contact info for TPAS for free, impartial help.

Jerben

Looks like it's (5306 x 0.8) - 272 = £3972


This net contribution (£3972) will be grossed up to £4965, by the addition of £993 tax relief.


(I think this is how it works?)
Unless anyone knows better?

Linton

Jerben wrote: »

Looks like it's (5306 x 0.8) - 272 = £3972


This net contribution (£3972) will be grossed up to £4965, by the addition of £993 tax relief.


(I think this is how it works?)
Unless anyone knows better?

Or perhaps more likely (5306-272)*0.8=£4027 with HMRC adding on £1007. Many company pension schemes pay the employee contribution gross. This assumes no other income and no other pension contributions in this tax year.

pvt

What is the situation with the employer's contribution. In this instance is the £272 the combined employee + employer contribution, or just the employee's contribution?

And if it is a contribution to a DB scheme, does this calculation still apply?

Linton

pvt wrote: »

What is the situation with the employer's contribution. In this instance is the £272 the combined employee + employer contribution, or just the employee's contribution?

And if it is a contribution to a DB scheme, does this calculation still apply?

The calculation both for tax and for comparison with earnings only involves the employees actual contributions and is the same for DB and DC. It gets more complicated with DB pensions and the comparison against the £40K Annual Allowance.

pvt

Linton wrote: »

The calculation both for tax and for comparison with earnings only involves the employees actual contributions and is the same for DB and DC. It gets more complicated with DB pensions and the comparison against the £40K Annual Allowance.

So if your total salary is well under £40k, it makes no difference if it's DB?

I'm looking at doing a SIPP for my OH and salary is £13,000 gross, with a £715 employees pension contribution. I'm seeing (13000-715)*0.8 = £9,828 as the figure we can pay in - which would then be topped up to £12,285 with tax relief?

And apologies to Buttercup for hijacking the thread